This Wednesday, September 3, the U.S. lottery game Powerball will hold its drawing for a jackpot worth 1.3 billion dollars, after at least 40 consecutive drawings without a winner.
If no one matches all five numbers plus the “Powerball” tonight, the jackpot will continue to grow until a ticket matches the winning combination.
The eventual winner will have two options to claim the prize: annual payments distributed over the next 30 years, or a single lump-sum cash payout. In both cases, the U.S. federal government will claim a significant share in taxes, and in some states, the state government will also take its cut.
The states that do not levy state income taxes on lottery winnings are: Alaska, California, Delaware, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
How much will the winner actually receive?
According to the specialized site usamega.com, the Internal Revenue Service (IRS) withholds 24 percent of the prize upon claiming. However, when the winner files their 2025 tax return, they will owe additional federal taxes.
If the jackpot winner opts for the lump sum, the cash value of the 1.3 billion dollar prize would be 589 million dollars before taxes.
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From this amount, 24 percent—or 141.36 million dollars—is withheld immediately. Later, the winner must pay an estimated additional 76.5 million dollars in federal income taxes. If the winner is not a U.S. citizen or permanent resident, the initial withholding rises to 30 percent.
This leaves the winner with 371,145,938 dollars if they live in one of the 11 states, such as Florida, California, or Texas, that do not tax lottery winnings. In states that do impose state taxes, the amount is reduced further. For instance, in Illinois, which levies a 4.95 percent state tax, the winner would ultimately receive “only” 341,957,480 dollars.
If the winner chooses the annuity option, the total is distributed differently depending on the state. In states with no lottery tax, that would mean 30 annual payments averaging 27.3 million dollars. In Illinois, for example, it would be 30 payments averaging 25.2 million dollars.
Payouts by State
The specialized site compiled a table showing the final amounts a potential winner would receive after federal and state deductions in every jurisdiction where Powerball is played.
Here are some examples:
- California (no state tax): Lump sum – $371,145,938; 30 annual payments – $27,375,938
- Florida (no state tax): Lump sum – $371,145,938; 30 annual payments – $27,375,938
- Texas (no state tax): Lump sum – $371,145,938; 30 annual payments – $27,375,938
- Illinois (4.95% state tax): Lump sum – $341,957,000; 30 annual payments – $25,230,000
- Maryland (9.5% state tax): Lump sum – $315,190,000; 30 annual payments – $23,259,000
- Washington, D.C. (10.75% state tax): Lump sum – $307,828,000; 30 annual payments – $22,717,000
- Wyoming (no state tax): Lump sum – $371,145,938; 30 annual payments – $27,375,938
(For a complete breakdown by state, see the detailed table on the specialized site.)
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How to Play
Powerball is available in 45 U.S. states, Washington, D.C., Puerto Rico, and the U.S. Virgin Islands. Each ticket costs 2 dollars, except in states like Idaho and Montana, where it costs 3 dollars per play.
Players must select two sets of numbers: five white balls from 1 to 69, and one red ball from 1 to 26.
Drawings are held every Monday, Wednesday, and Saturday at 10:59 p.m. (ET), broadcast live from the Florida Lottery studio in Tallahassee.
To win the jackpot, a ticket must match all five white balls in any order plus the red Powerball. If there is no winner, the jackpot rolls over to the next drawing until someone claims the prize.
